When thinking about food supply chain problems, deforestation is the first thing springing to mind. To get to the root of this issue, you should focus on your value chain’s first mile, where smallholder farmers’ agricultural activity may gnaw on forested areas.
But how does deforestation affect your business operations?
Besides preventing a sustainable food supply chain management, forest clearance will cut down your profits too. That’s because importing countries are issuing more stringent agriculture traceability regulations to ban forest-risk products from the market.
However, Farmforce has come up with an agtech innovation to ensure your value chain is forest-friendly. Before revealing the benefits of our agricultural supply chain software, let’s look into how lack of compliance will impact your agri-business returns.
The economic impact of deforestation on the agri-business sector
Last November, the EU unveiled a new law proposal to tackle deforestation associated with six agricultural products: cattle, soy, palm oil, coffee, cocoa, and wood. With the same purpose and timeline, the UK government passed its Environmental Act into law to prevent agri-businesses from trading forest-risk crops (e.g., cocoa, coffee). In December, the UK went a step further by opening a consultation to fine-tune the obligations’ scope (e.g., type of crops and businesses affected, due diligence requirements).
Both legislations force businesses to perform a due diligence on their food supply chain to reduce deforestation risk and publicly disclose their data every year. While the UK will share more details on companies’ duties after the consultation closes in March, the EU has already revealed their ambitious production traceability expectations.
- For instance, companies will have to prove their agri-products have not been farmed on deforested or degraded lands since 31 December 2020.
- On top of that, they should ensure their crops are produced in accordance with the growing country’s laws.
- To fulfill these obligations, organizations will have to gather extensive food supply chain data on their crops, including the amount traded, the supplier, the country of origin, etc. Most importantly, to demonstrate that their product is obtained through sustainable farming techniques, businesses are required to collect the geographic coordinates of the plots where their crops were farmed.
- Based on the data acquired, companies will also need to assess their food supply chain deforestation risk and implement mitigation solutions (e.g., conducting independent surveys).
Aside from not being able to place their products on the market, businesses failing to comply with the new rules will face fines of up to £250,000 (UK) or starting from 4% of the business’ yearly turnover (EU).
So, how can you meet law requirements and future-proof your business?
Multinational companies (MNCs) in the agri-business field will need a higher level of visibility right from the value chain’s first mile.
Sounds like a challenging commitment?
Then, you’re reading the right post. It’s time to shed some light on how you can use our anti-deforestation food supply chain traceability software to save your profits.
Farmforce anti-deforestation technology for sustainable agriculture
If thinking about geographical coordinates makes you lose the plot, don’t you worry. Our food supply chain management software as a service (SaaS)’s “Polygons” feature is coming to the rescue.
So, how does that work?
Basically, a field operator, a.k.a. mapper, walks around the plantation’s border and logs the coordinates of a certain number of points into our mobile app’s “Fields” module. Based on the input data, the “Polygons” functionality will then automatically generate GPS-mapped plots for that growing area. Yet, the mapping capability of our farm tracking software goes beyond farmers’ fields. Using the “Public Infrastructure” module, we can also digitize nearby National Parks, rivers, and other protected natural habitats.
Traders can then access our Information Management System (IMS) web platform and overlay the mapped fields with Farmforce digitized protected areas. For each of the overlapping plots (if any), our food supply chain technology will then give you the overlay extent and its owner.
But you can also export our shapefiles (i.e., polygons) and upload them onto the Global Forest Watch (GFW) map. Leveraging satellite imagery, this free database gives you the tree cover loss that occurred over the last 20 years across the world. In other words, you’ll see whether your polygon incorporates any area that’s been deforested over time.
Apart from “Polygons” and “Public Infrastructure” features, you can use the Farmforce “Certification & Quota Management” component to monitor deforestation. Through this functionality, field users can check farmers’ deliveries against their certified crop quotas (i.e., maximum allowance). This means our system will flag and keep track of any mismatching straight away. And that’s important as product surplus may come from a deforested area.
A hassle-free deforestation due diligence
Once you’ve verified that a plot is deforestation-free, you can go to the Farmforce “Fields” module and mark it as “initially approved”. Another way of tracking your deforestation due diligence is to navigate to the “Producers” tab. Here you’ll find a list of farmers and their mapped fields. After checking polygons against deforestation as explained above, you can tag a producer as “tree loss cover problems” or “tree loss cover ok”. This will come in handy to keep track of your progress. For example, if you want to follow up on at-risk farmers, you could filter them by the relevant tag. Doing so, you’ll boost your deforestation mitigation efficiency.
However, to ensure your deforestation due diligence is up to standard, Farmforce is designing a new tool integrating our farm-to-fork traceability software with the EU framework. This interactive dashboard will have the following 5 tabs:
- Traceability: Here you’ll see your harvest farm-to-import chain of custody. This is the core element of Farmforce, which lets you track your products back to the field they were farmed. In terms of field traceability precision in your food supply chain, you can come across three models:
- Bag-level: In an ideal scenario, the exporter warehouse will receive bar-coded bags of crops which are tracked back to their respective fields through our agtech software.
- Farmer-level: In this case, the exporter won’t see a barcode on each bag. However, you will know how many of the received bags belong to a certain farmer. Therefore, you’ll be able to trace all those bags to the farmer’s mapped field.
- Coop-level: This is the least granular model, where you can’t single out neither bags nor farmers. However, the exporter will know which farmer group or coop the received bags come from. And because our agriculture management software maps the fields of all coop members, you can still link the amount of crop received to the relevant plots.
- Risk assessment & mitigation: In this section, you can evaluate each risk (e.g., a field mapped incorrectly) and adopt a strategy (e.g., set up an automated check for shape irregularities, add coop manager approval) to reduce it.
- Legislation documentation: This section will store growing country-specific regulations your crops production should adhere to.
- Cocoa demo: This is an example of what is mentioned in the traceability section. For each import and producer, you’ll be able to prove that your harvest was farmed in a deforestation-free plot. While our tool demo version showcases the cocoa supply chain in Côte d’Ivoire, our system will adapt to any other scenario. Also, while our demo relies on GFW to check for deforestation, our upgraded system will include the standardized method currently being developed by the EU.
- Due diligence statement: Finally, this tab will summarise all the information (e.g., import, producer, and field ID, deforestation check date, risk level, and mitigation strategies implemented) requested by the EU law in a comprehensive report.
While still being a demo version, MNCs can already get in touch to arrange for the implementation of this integrated tool.
Relying on this comprehensive dataset, you’ll have no problems achieving certifications such as the Rainforest Alliance. Accordingly, you’ll magnify the visibility of your deforestation efforts.
Ultimately, our supply chain visibility software offers you an effective solution to look out for deforestation at a farm level, thus enabling its sustainable management. By demonstrating that your crops are deforestation-free, you’ll comply with importing laws while future-proofing your revenues.